Topics
More on Mergers & Acquisitions

Baylor Scott & White Health, Memorial Hermann announce merger

The systems include 68 hospital campuses, more than 1,100 care delivery sites, nearly 14,000 employed, independent and academic physicians.

Beth Jones Sanborn, Managing Editor

WHAT HAPPENED

The boards for Baylor Scott & White Health and Memorial Hermann Health System have announced the signing of a letter of intent to merge "to further strengthen communities, advance the health of Texans and transform the delivery of healthcare," the systems said.

THE IMPACT/WHY IT MATTERS

Both are faith-based systems and together employ more than 73,000 people across Texas. The systems together help drive the economies of more than 30 Texas counties. The two systems include 68 hospital campuses, more than 1,100 care delivery sites, nearly 14,000 employed, independent and academic physicians and two health plans with nearly 10 million patient encounters annually recorded.

WHAT IS THE TREND

Merger and acquisition activity has broken records this year, reaching an unprecedented level. At the same time, mergers between larger systems have hit their fair share of challenges as well and some argue that mergers result in higher care costs and unexpected financial challenges for the health systems involved.

A mega-merger involving Beth Israel Deaconess and Lahey Health has been stalled as stakeholders and public officials debate whether the merger would have an adverse effect of the regional healthcare market.

ON THE RECORD

"This is about two mission-driven organizations – both committed to making safe, high-quality healthcare more convenient and affordable – building something transformative together," said Jim Hinton, CEO of Baylor Scott & White Health. "We must lead the change in our industry, while insisting we continue to fulfill our unwavering commitments to meeting the needs of all Texans."

"Together, we believe we will be able to accelerate our commitments to make care more consumer centric; grow our capabilities to manage the health of populations; and bend the unsustainable healthcare cost curve in the state," said Chuck Stokes, president and CEO, Memorial Hermann.

THEIR TAKE

Among the details of the letter are that a unified board will be formed comprised of an equal number of appointees from both organizations. Current chair of the Baylor Scott & White Holdings Board Ross McKnight will serve as the first chair of the proposed combined system's board. Memorial Hermann Health System Board of Directors will appoint a vice-chair to be named prior to closing and will become chair at the end of McKnight's two-year term.

Baylor CEO Jim Hinton will be the CEO of the proposed combined system and will be joined in the Office of the CEO by Chuck Stokes and Baylor President Pete McCanna. The proposed combined system will have executive and support staff based in Austin, Dallas, Houston and Temple.

The newly proposed system will rebrand and the new name will take effect before the deal closes. However, Baylor Scott & White Health and Memorial Hermann will continue to operate under their strong, highly regarded brands in their respective service areas.

Now that letter has been approved, the systems are immersed in exclusive negotiations as well as the standard regulatory reviews. A definitive agreement is slated for completion in 2019.

Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com

Show All Comments